Assignment Fee Markup
You have a great deal under contract, now it’s time to market the deal to your cash buyers list. Before sending out to your cash buyers, you need to determine your assignment fee markup. How much can you make on this deal with still leaving plenty of meat on the bone for your buyer?
As a beginner, I suggest aiming for $10,000. You can certainly make more if it’s a slam dunk deal, but I wouldn’t get too greedy with a small buyers list and no reputation. You might ask for 15k to allow for some negotiation.
Now, if your deal doesn’t have as much margin, you might have to settle for something smaller, like 5k. Still good a good chunk of change, right? Your assignment fee markup will be largely determined by how big a discount you negotiated with the seller. I have made $40,000 + on deals and I’ve known other wholesalers who have earned nearly $100,000 on one assignment fee. Yep, this business can very good to you 😉
Marketing Your Deal To Cash Buyers
There are many ways market your wholesale deal to your buyers. You can send out an email blast using Mailchimp, Convertkit or Close. You can post your deal to Facebook groups, or reach out to your buyers directly.
Direct Outreach
The most effective method is direct outreach. I highly recommend taking the time to call, text and email your buyers directly for your first few deals. This direct method of communication will have a much higher response rate. You will also get direct feedback from your buyers on what they think your deal.
Direct outreach is also the best way to build relationships with your buyers. Being a rockstar wholesaler is all about networking and building lasting relationships with your buyers. The more interaction you have with your buyers, the better. Buyers love the idea of being on your VIP list. They want to be the first to know about a deal when you have one.
Using Email Marketing to Blast out a Wholesale Deal
Once you’ve built up a sizable cash buyers list, email marketing is the way to go. You can cast a much wider net and send a deal to hundreds of buyers quickly. This doesn’t mean you shouldn’t contact your top buyers directly. I have over 1,000 buyers on my list but I still let my top buyers know when I have a deal. I usually give them a heads up a day before I send out to my main list.
I wrote an entire post on marketing your wholesale deals with Mailchimp.
Here is what one of my email blasts looks like.
Mailchimp also gives you helpful metrics for each email blast. You can see who opened the email, who clicked the photos link and even how many times they clicked on a link. So if one of your buyers clicked on the photos link 7 times there’s a pretty good chance they are interested in the deal!
I also have a disclaimer at the bottom of the email that my company makes no guarantees or warranties and the property is being sold “as is”. I reiterate that the buyer must do their own due diligence. The buyer is also responsible to pay the seller’s standard closing costs such as title insurance, transfer tax and closing fee. This is all noted in my disclaimer.
Facebook Marketing
One my favorite platforms for marketing a wholesale deal is Facebook. In step 8, we talk about building your cash buyers list using Facebook. FB isn’t just for building your buyers list, but also for marketing your deals. Make sure you join the top 2 or 3 RE investor groups in the area (usually there are many). Look for groups with at least 1,000+ members and at least 10 posts per day. Make sure you read the rules, there are some groups that won’t allow listed properties to be advertised and others that require certain details about deal (address, price, etc).
Post your deal with your pictures link and asking price. Include your ARV and repair estimate if you have one. Don’t give out the lockbox code if there is a lockbox on the property. People will go out there without your permission!
Ask interested buyers to private message you. If you have joined the right groups, your deal should be seen by hundreds of active cash buyers!
JV Your Deal with Another Wholesaler
If you read my blog, you know how much I stress this. If you are new and don’t have buyer relationships, it’s a lot easier to partner up with a reputable wholesaler to move your first few deals. JV simply means joint venture. You are bringing the deal and the other wholesaler is bringing the buyer. Typically you would split the assignment fee 50-50 in a JV wholesale deal.
When I first started , I JV’ed my first 10-15 deals with another wholesaler. He had a massive buyers list and he was able to sell most of my deals within 24 hours. I was fine to splitting the assignment fee 50-50 as I was building up my own list.
Even if you have a small list of 50-100 buyers, if you are new and haven’t done any deals with them they won’t be as responsive to your emails. Relationship building is key is in this business. I strongly recommend you work a reputable wholesaler for your first few deals.
Getting Your Buyers Through the Property
If it’s a really good deal, you might be able to sell it sight unseen. If the house is vacant, ask the seller if it’s ok that you put a lockbox on it. This will make it so much easier to get your buyers through it.
If the house is occupied by either the homeowner or a tenant, you will likely need to schedule a time to show it with the seller. Depending on how you positioned your role in the transaction, tell the seller you need to bring your partners, contractors, etc out to see the house during your 10 or 15 day inspection period.
If you sense that you have any buyers unfamiliar with how a wholesale deal works, you might need to walk them through the process before the walkthrough. The last thing you need is your buyer talking to your seller about price! Yes, I’ve been there. Not fun!
If you had multiple buyers interested, hopefully you were able to get most of them out at the same time. It’s a pain trying to schedule multiple showings if the house is owner occupied. Not to mention the seller may start asking more questions.
In Step 10 we will talk about reviewing offers, final negotiations with buyers and closing the deal at your local title company.
Related: Wholesaling Real Estate Step 10: Assigning the Contract and Closing with Title
